|CGS CIMB||CGS CIMB|
Lendlease Global Commercial REIT
An undervalued REIT
■ FY6/21F will be a fresh start for LREIT, in our view. It has factored in the potential Covid-19 impact in FY20 and we expect footfall to gradually recover.
■ The portfolio is supported by the long lease structure of Sky Complex and annual escalation from 91% of its NLA, which limits income downside risk.
■ LREIT is trading at an attractive 0.77x FY20 P/BV vs. sector average of 0.9x. It offers ~7% dividend yield. Initiate coverage with an Add (TP: S$0.85).
Dairy Farm Int'l
Back at palatable valuations
■ Share price has retraced closer to YTD trough of US$3.70, at 17.2x forward P/E (close to -1.5 s.d. of historical mean), pricing in the weaker FY20F.
■ Medium-term prospects are uncertain, but we think sentiments for the stock will improve, at least to its -1 s.d. levels, once recovery plays are revisited.
■ We view the risk-rewards as favourable for longer-term investors. Upgrade our call to Add, with a lower TP of US$4.50 (on unchanged 20x FY21F P/E).
CapitaLand Mall Trust
The dragon awakens
Merger benefits not priced in. CMT trades at attractive valuations at close to 1.0x P/NAV and an implied EV/GFA of S$1,864, a good discount below recent transactions. With forward yields of >6%, beyond 1 standard deviation of its mean, the risk-reward ratio is attractive. The proposed merger with CapitaLand Commercial Trust (CCT) will drive improved diversification and scale which have yet to be priced in.
Check out our compilation of Target Prices